Mary Elaine Perkins, who owned Carlton Financial Enterprises, defrauded 90 investors of about $7 million in a real estate scheme, the U.S. attorney's office says.

The owner of a Hermosa Beach loan company has pleaded guilty to a felony mail fraud charge related to a scheme in which she defrauded 90 investors of about $7 million, a spokesman for the U.S. attorney's office said Wednesday.

Mary Elaine Perkins, who owned Carlton Financial Enterprises Inc., entered into the plea agreement Monday, said Thom Mrozek, a spokesman for the U.S. attorney's office.

FOR THE RECORD: Loan fraud: An article in Business on Thursday about Hermosa Beach mortgage lender Mary Elaine Perkins, who pleaded guilty to mail fraud, incorrectly reported her last name as Parker on second reference. —

Parker told investors that she would use their money to make short-term, high-interest loans to residential real estate owners who had difficulty obtaining financing. The so-called hard-money loans rely on the value of the real estate used as collateral instead of the borrowers' credit history.

Mail fraud carries a maximum possible sentence of 20 years in federal prison, but prosecutors are recommending a much lighter sentence because of Parker's decision to plead guilty at an early stage. Sentencing is scheduled for Sept. 13.

According to the plea agreement, Parker promised to pay returns of 12% to 15% to her investors.

In some instances, she took investor money and did not make loans, according to the court document. In others, she foreclosed on borrowers' real estate and sold it to another company she owned — or to her family members — without repaying investors proceeds from the sale.

Early investors received interest payments that came from later investors, federal prosecutors said.

"When you pay people back with money that's either their own or from other people, that's troubling. Market integrity is everything," said Assistant U.S. Atty. Gregory W. Staples, who prosecuted the case.

Perkins' guilty plea comes one year after a controversy surfaced involving another hard-money lender. Investors in Orange County filed a lawsuit last year accusing Dan J. Harkey, owner of Point Center Financial, of making risky loans in which borrowers lacked required equity and of diverting proceeds to himself.

Harkey, who is married to Assemblywoman Diane Harkey (R-Dana Point), denied wrongdoing and blamed loan defaults on the crash of the real estate market. The lawsuit is scheduled to go to trial next year.